MIRA LOMA, Calif.—Gladstone Investment Corp. has invested $16.4 million in Mira Loma-based Mitchell Rubber Products Inc., a rubber molder and mixer.
Gladstone Investment will assume both an equity and debt position in the company, said Ted Ballou, Mitchell Rubber president and CEO. He declined to release additional specifics on the agreement with the company. Mitchell Rubber remains a privately held business, he said.
“(Gladstone Investment) is going to partner with the company to help fund growth,” Ballou said. “We plan to expand the business that we're in, and they're helping to fund growth and recapitalize the company. Our orders are up; things are looking good. We're going to continue to press forward and expand our business.”
Mitchell Rubber serves the automotive, construction and agricultural industries. It operates a mixing facility in the City of Industry, Calif., and a molding plant in Mira Loma.
The company's yearly sales amount to about $50 million, and it's experiencing approximately 10-percent annual growth, Ballou said. Mitchell Rubber has slightly less than 400 employees.
Its clients include General Motors Corp., CNH Corp., Caterpillar, John Deere and Navistar.
“We do business in the automotive, off-highway truck markets,” Ballou said. “We have proprietary flooring. We also supply rubber to the construction markets.”
The firm makes heavy-duty truck accessories such as splash guards, wheel chocks and bumpers; truck bed mats; safety surfaces made of recycled tires; and weight room flooring.
The funding from Gladstone Investment will help Mitchell Rubber continue to serve the markets in which it already operates, and take on several new projects it is developing with strategic customers that require additional capital, Ballou said.
“We have a good partner in Gladstone that is willing to help us and help fund our growth,” Ballou said. “They have a very good portfolio of companies, and the principals have been in the business for a long time. They have a very good reputation, and their goals of investing in solid companies that are going to grow seemed like a very good fit for us.”
Gladstone Investment is a publicly traded business development company that invests in small and mid-sized companies in the U.S. via acquisitions, changes in control and recapitalizations.
Mitchell Rubber experienced growth in sales in 2010, and it “looks to be growing in 2011,” Ballou said. “Our sales are up this year, so I would anticipate that with adding new projects, we'll be hiring. We don't have an absolute number at this point, but as sales continue to grow, we'll be employing more (people).”
Gladstone Investment President Dave Dullum said the company looks forward to working with the management team at Mitchell Rubber, led by Ballou.
“Mitchell Rubber performed exceptionally well through the economic down- turn and is currently positioned to continue growing by expansion within its existing customer base and through new business development efforts,” Dullum said.
Gladstone Investment officials released a statement saying the firm's investment consisted of subordinated debt and equity, but company officials could not be reached for further comment.